In In Re HP Inkjet Printers, the Ninth Circuit yesterday reversed the district court’s orders granting final approval to a class-action settlement between Hewlett-Packard Company and a nationwide class of consumers who purchased certain HP inkjet printers, and awarding attorneys’ fees. Here is the summary issued by the court:
The panel held that the attorneys’ fee award to class counsel violated the Class Action Fairness Act (“CAFA”), and specifically 28 U.S.C. § 1712(a)-(c), which governs the calculation of attorneys’ fees in class action cases containing a coupon component. The panel held that when a settlement provides for coupon relief, either in whole or in part, any attorneys’ fee that is “attributable to the award of coupons” must be calculated using the redemption value of the coupons. The panel reversed and remanded, because the district court awarded fees that were “attributable to” the coupon relief, but failed to first calculate the redemption value of those coupons.
Judge Berzon dissented, and would hold that there was no violation of § 1712 of CAFA, where the district court did not award a contingency fee calculated as a percentage of the purported value of the total class recovery, but instead chose to award a lodestar fee, calculated on the basis of hours worked and rates charged, carefully limited by a fair estimate of the amount of the benefit received by the class. Judge Berzon would affirm the district court because the fee award was consistent with CAFA.